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Israeli Venture Firm Partners With NYC to Launch Cybersecurity Accelerator

Jerusalem Venture Partners Launches Cybersecurity Hub in Partnership with New York City

Jerusalem Venture Partners Launches Cybersecurity Hub in Partnership with New York City

The focus of venture capital funding in cybersecurity is changing. While it used to involve finding a new idea with good technology, the emphasis is now switching from startups to funding and helping growth in existing, proven, companies. “I think you need substance,” Jerusalem Venture Partners founder and chairman Erel Margalit said in December 2019. “It’s good to have great concepts. It is an era of conceptual companies. But you need technology and substance to be with it. You have to have a great concept but you also have to have a business model.”

Last month, Strategic Cyber Ventures launched a Special Purpose Acquisition Company (SPAC) specifically designed to buy an existing platform that can be grown into a major player. This month, Jerusalem Venture Partners (JVP), together with the New York City Mayor’s Office and the Economic Development Corporation of New York, launched The JVP International Cyber Center at 122 Grand Street, Soho, Manhattan. While not specifically excluding startups, the primary purpose of the center is to help companies that have already established a presence grow to the next level.

The center started with a single floor. Three months ago, it comprised ten companies. Now, with the official launch, “We have the whole building and thirty companies,” JVP founder and chairman Erel Margalit told SecurityWeek. “Most of them are companies with between $5 million and $20 million in annual revenue, and are scaling up to the next level.” The purpose of this new cybersecurity hub is to provide the ecosystem and help necessary for growth to $100 million or $200 million companies — and eventually perhaps to the next $1 billion cybersecurity business.

JVP is building a complete growth ecosystem for these companies. “Firstly,” explained Margalit, “we could be an investor; but secondly we can help with recruitment and customers.” JVP is working with the New York banks and the major media organizations, and has partnered with local universities, such as Columbia and NYU, and Cornell and CUNY. But companies at the center do not have to be JVP clients. “JVP does not invest in the majority of companies, but we can help and foster and give advice — such as introducing them to some of the more experienced CEOs.”

“Our vision to transform the city into the cyber capital of the world, combined with JVP’s extensive experience in driving change through innovation, creates the perfect recipe to give rise to the next wave of cybersecurity startup success stories,” said NYCEDC President and CEO James Patchett. “The opening of the Center will create a unique bridge linking global cities and companies with New York City’s thriving cyber ecosystem.”

International ambition is strong in both JVP and the center. New York was chosen as the site not just for the potential of the city itself, but because it is a launchpad for American companies wishing to expand into Europe, and a beachhead for European companies wishing to expand into North America. “While the Silicon Valley is the US technology hub,” Margalit told SecurityWeek, “we’re building New York here as an international cybersecurity hub. The launch of the JVP International Cyber Center signals the start of the city’s emergence as a global center for tech and innovation. The Center will act as a launching pad for new technologies, which will not only help protect the city’s institutions and way of life, but also have the potential to change the world we live in.”

Margalit expects growth in more than just the resident companies — he also expects his hub concept to grow. “We already have the biggest cybersecurity hub in Israel,” he said, “where we continue to invest in and help create many of the new ‘ex-8200’ cybersecurity startups, and we help these companies grow in the U.S. or Europe. So, we have experience in this.”

In the future, he added, “We might look at an additional hub or hubs in North America, but I think one of the next major stops for us should be in the UK or Europe. For most of the companies we look at, the first priority will be the US or North America, and the second priority would be Europe. But for many of our companies, Europe is now even bigger than the US. It used to be that we would automatically help these companies reach the US, but now the European market is equally important.”

This is partly why the New York City center was so well attended by around 15 delegations from European cities, many of which will be hoping to entice JVP to their own city. “We’re talking to a few and will need to make a European decision in the next year or so,” he said. The UK, especially London, is still being considered. Margalit considers London to be one of the most vibrant ecosystems “for fintech, for technology, and it is very international — which is important for us.” But much will depend on the sort of post-Brexit European trade arrangements that evolve over the next year. “Paris, Berlin, Amsterdam and others are also interesting. We’ll see. We’re talking and will continue to talk.”

Meanwhile, the JVP International Cyber Center in New York is expected to benefit both the wider cybersecurity ecosphere, and the city itself. Companies already resident include businesses such as ThetaRay, Centrical, Coronet, Loom, and Quali, and their growth is expected to create thousands of new jobs for the city. These companies can apply to JVP’s Scalarator program, where they can receive advice on tailored programs and plans, strategic planning, marketing, business development, recruiting, and financing. Guiding and supporting these companies will be senior leaders at JVP, subject matter experts, and experienced cybersecurity executives and entrepreneurs.

“The best next-generation startups will be very dedicated to the vertical spaces they serve,” Margalit told SecurityWeek. For this reason, we can expect the new center to have a focus on companies serving areas such as fintech and healthcare, especially those involving big data analytics and artificial intelligence. “The intersection between technology geniuses and business leaders is the most interesting place to be right now,” he continued. “The kind of companies we backed five years ago do not make sense anymore. You need vertical expertise.” New York is an excellent source of this expertise to help growing companies.

Related: Snyk is Latest Cybersecurity Unicorn After Adding $150 Million in Funding 

Related: Intezer Raises $15 Million in Series B Funding 

Related: UK Email Threat Firm Tessian Secures $13 Million Series A Funding 

Written By

Kevin Townsend is a Senior Contributor at SecurityWeek. He has been writing about high tech issues since before the birth of Microsoft. For the last 15 years he has specialized in information security; and has had many thousands of articles published in dozens of different magazines – from The Times and the Financial Times to current and long-gone computer magazines.

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